Correlation Between Cahayaputra Asa and PT Indonesia

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Can any of the company-specific risk be diversified away by investing in both Cahayaputra Asa and PT Indonesia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cahayaputra Asa and PT Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cahayaputra Asa Keramik and PT Indonesia Kendaraan, you can compare the effects of market volatilities on Cahayaputra Asa and PT Indonesia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cahayaputra Asa with a short position of PT Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cahayaputra Asa and PT Indonesia.

Diversification Opportunities for Cahayaputra Asa and PT Indonesia

CahayaputraIPCCDiversified AwayCahayaputraIPCCDiversified Away100%
-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cahayaputra and IPCC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cahayaputra Asa Keramik and PT Indonesia Kendaraan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indonesia Kendaraan and Cahayaputra Asa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cahayaputra Asa Keramik are associated (or correlated) with PT Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indonesia Kendaraan has no effect on the direction of Cahayaputra Asa i.e., Cahayaputra Asa and PT Indonesia go up and down completely randomly.

Pair Corralation between Cahayaputra Asa and PT Indonesia

Assuming the 90 days trading horizon Cahayaputra Asa Keramik is expected to generate 0.38 times more return on investment than PT Indonesia. However, Cahayaputra Asa Keramik is 2.62 times less risky than PT Indonesia. It trades about -0.11 of its potential returns per unit of risk. PT Indonesia Kendaraan is currently generating about -0.07 per unit of risk. If you would invest  14,900  in Cahayaputra Asa Keramik on September 27, 2024 and sell it today you would lose (300.00) from holding Cahayaputra Asa Keramik or give up 2.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cahayaputra Asa Keramik  vs.  PT Indonesia Kendaraan

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15CAKK IPCC
       Timeline  
Cahayaputra Asa Keramik 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cahayaputra Asa Keramik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Cahayaputra Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec135140145150155160165170175
PT Indonesia Kendaraan 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PT Indonesia Kendaraan are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Indonesia may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec650660670680690700710720730740

Cahayaputra Asa and PT Indonesia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.26-2.44-1.62-0.8-0.01320.751.552.343.133.93 0.050.100.15
JavaScript chart by amCharts 3.21.15CAKK IPCC
       Returns  

Pair Trading with Cahayaputra Asa and PT Indonesia

The main advantage of trading using opposite Cahayaputra Asa and PT Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cahayaputra Asa position performs unexpectedly, PT Indonesia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PT Indonesia will offset losses from the drop in PT Indonesia's long position.
The idea behind Cahayaputra Asa Keramik and PT Indonesia Kendaraan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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